Medicare only pays a small portion of long-term care (usually the first 20 days in a skilled nursing facility and a portion of the cost for the next 80 days) and only if that admission to a skilled nursing facility follows a three-day hospital stay.

Medicare is designed to cover a short-term acute care stay. "In other words, Medicare pays a claim when you're going to get better," says Annie Winterbottom, financial services representative of Pennsylvania Business Group, an office of MetLife Financial Services.

For example, if you fall and break your hip, you will probably be admitted to the hospital. Medicare will pay for a three-day stay followed by a short stay in a skilled nursing facility to help with your rehabilitation.

However, if you have Alzheimer's, your care will most likely be over an extended period of time. Typically the maximum Medicare pays is 100 days of care. After that it no longer pays and you must use your own assets.

The cost of such care is not cheap. The average stay in a skilled nursing home is $155 to $195 per day. It varies from state to state, with Alaska being the highest at $300 a day and Louisiana and Arkansas the lowest at $79 a day.

And that's why you should consider having an insurance policy in place to assist with those costs. Otherwise you may deplete your entire life's assets fairly quickly.